The Future of Digital - Slides from Business Intelligence plus Commentary

Business Intelligence just released a new presentation on "The Future of Digital".

Some of these slides were included in their previous slidedeck on "The State of the Internet" which I posted on our blog available at albrightdigital.com, but there is a lot of new data as well.  I’ve summarized some of the key highlights below.  The slidedeck is 137 slides, but well worth the read!

Business Intelligence: The Future of Digital

The Future of Digital: Highlights

There are many great take-aways from this presentation from Business Intelligence. It covers Internet growth, smartphone and tablet growth, digital advertising, print, TV, mobile usage and mobile revenue trends.  Here are some of the highlights:

General Internet and PC/ Tablet/ Smartphone:

• 1/3 of the world population is now on the Internet
• PC sales have leveled out; growth from connected devices is coming from tablet and smartphone sales
• Smartphone penetration is still early when you consider the worldwide impact, but in places like the US, smartphone penetration is already greater than 50%
  
  

Digital Advertising:

• People are moving online to consume content, and therefore ad revenues are being impacted
• Digital ad revenue had grown considerably over the past 5 years, where print has been hammered
• Some paywall subscription programs are growing (e.g., NY Times), but “digital dimes” can’t replace millions of lost offline revenue
• Google ad revenue is now bigger than both newspapers and magazines total ad revenues
• Print has been disrupted and we are on other side; will TV be next?
• Local TV ad revenue as well as traditional network TV ad revenue is dropping, while TV ad spending has grown — this means ad spending is being distributed across cable and other TV brands (non major network like CBS)
• However, users’ viewing habits are also changing; users are now watching less live TV, more recorded TV, and more streaming
• As people move online to consume content, there are less ads per content min than on TV — this will impact revenues
• There are also many more potential ad products and rich ad experiences online, so there is still a lot of room for innovation and future ad revenue to be generated
• Users are spending more time on social and less time on portals
• Large e-tailers are also starting to get into the digital advertising game: Amazon (already generating $1B annually in digital advertising), WalMart, BestBuy, and Target
  
  

Mobile Usage/ Revenue:

• So we all know people are moving to mobile, especially here in the US, to do more — what are they doing on mobile? Games, social media. shopping, researching products/ places, mobile payments
• The growth in mobile payments is HUGE in the past 12 months
• There are also things that are uniquely mobile: Angry Birds, Instagram, etc.
• Mobile usage is up across the board, making digital access 24×7; this also means that access via other mediums is decreasing, print, TV, and even online
• The promise of mobile advertising is still looming in the future — it hasn’t gotten here yet – Why not? ARPU on mobile still very low due to low CPMs, which are due to ineffective and basic ad products on mobile that dominate today — this includes basic search advertising and banner ads on mobile
• Native mobile ads are finally appearing and we are just at the start of this innovation – future integration of location-based advertising and interactive mobile ad products are in the not-too-distant future, and these ad products can command a higher CPM and grow ARPU
• Users spend more time in mobile apps than on the mobile web, but app revenues are still small mainly because freemium is still the dominate model; games dominate revenue
• The Apple vs Android debate continues … Smartphones and tablets are a 2-horse race
• Android is leading the smartphone market globally in part because they own China
• Apple is leading the tablet market globally
• Apple is clearly leading when it comes to app revenue AND commerce and web traffic
• When you look at mobile profits, Apple and Samsung are the clear leaders, which Apple falling slightly and Samsung growing strong
  
  

It is a 4-screen world, and it is here to stay!